Technology

iPhone 8 Gamble: Apple Killed The iPhone 7S, Customers Haven’t

You have heard before that the iPhone 8 sales haven’t been great. Most buyers are holding out for the iPhone X or taking advantage of the price cut to buy the iPhone 7 and 7 Plus. The Cupertino company used to follow a pattern where it would unveil an ‘S’ moniker handset every other year. The ‘S’ versions are usually minor upgrades. Apple skipped the ‘iPhone 7S’ moniker to introduce the iPhone 8. But in consumers’ minds, the iPhone 8 is merely iPhone 7S, and rightly so. The iPhone 8 gamble doesn’t seem to have worked well.

Apple iPhone 8 Gamble
Image Source: CIRP (screenshot)

iPhone 8 gamble fails to pay off

A new survey suggests that the iPhone 8 and 8 Plus are selling more like ‘S’ versions. Citing data from the retail chain, Consumer Intelligence Research Partners (CIRP) said in its latest report that the iPhone 8 and 8 Plus accounted for 6% and 10% of iPhones sold during the September quarter.The iPhone 8 and 8 Plus were available only for eight days during the July-September quarter. The new iPhones accounted for 16% of the total iPhones sales in the US in the given period.

CIRP co-founder Mike Levin said Apple “changed the market dynamic” by announcing the iPhone X. The upcoming smartphone depressed the demand for the iPhone 8 and 8 Plus. Older smartphones such as the iPhone 7, 7 Plus, and others continue to see a strong demand. Levin believes that buyers went for the older models or decided to wait for the iPhone X, rather than upgrading to the iPhone 8 or 8 Plus. Apple’s iPhone 8 gamble appears to be a disappointment.

CIRP pointed out that the iPhone 6 had garnered 46% of sales in just 11 days. The iPhone 6S had achieved 24% of the total iPhone sales in just five days. Last year’s iPhone 7 family accounted for 43% of sales in two weeks. Based on CIRP’s data, Apple Insider noted that the iPhone 6 achieved 4.2% of the iPhone sales per day of availability. The iPhone 6S collected 4.8% and the iPhone 7 family gained 3.1%.

By comparison, the iPhone 8 and 8 Plus recorded only 2.25% of sales per day of availability. It doesn’t seem that bad considering it is the only iPhone that is under pressure from the imminent release of a revolutionary new iPhone. Mike Levin said the iPhone 8’s share is even lower than the iPhone 6S, which could be due to some buyers delaying the purchase in anticipation of the 10th-anniversary iPhone.

The iPhone 8 gamble: Buyers flock to the iPhone 7

The iPhone 8 and 8 Plus should have been called iPhone 7S and 7S Plus as they are only minor upgrades over the last year’s flagship models. The new iPhones feature wireless charging (which is so bad you wouldn’t want to use), a faster A11 Bionic chipset, and an improved camera. It retains a four years old design, which might have turned off a lot of potential buyers.

An analyst recently told investors that even the iPhone 7 was selling better than the iPhone 8. There isn’t a huge difference between the iPhone 7 family and the iPhone 8 family in terms of features. The iPhone 7 is selling at a reduced price of $549, which buyers find more attractive than shelling out $700 for the iPhone 8. This year’s major upgrade, the iPhone X, would launch on November 3. The iPhone X features Face ID facial recognition technology, a 5.8-inch OLED display, wireless charging, and many other new features. It has a starting price of $999.

Reports coming out of Asia claimed earlier this month that Apple had told its suppliers to cut the iPhone 8 production by about 50% in November and December. Apple was already producing the iPhone 8 and 8 Plus in low volumes because it knew that a majority of buyers would wait out for the iPhone X. Reducing the iPhone 8 output in half so soon after launch indicates that the iPhone 8 gamble might not have lived up to Apple’s expectations.

Separately, gadget recycling site Decluttr reports that they have witnessed more trade-ins of the iPhone 8 and 8 Plus than any other iPhone soon after its launch. According to CNet, the iPhone 8 and 8 Plus account for 7% of total buy-backs at Decluttr. Before the iPhone 8, the highest figure was 2% for the iPhone 6S. It’s unusual to see such a huge surge in trade-ins of a brand-new iPhone. It could be because people who have purchased the iPhone 8 now want to upgrade to the iPhone X.

Apple to make only 20 million iPhone X this year

The iPhone X is anticipated to see a strong demand. Pre-orders could sell out within hours. However, the phone has been facing production issues, which could hurt its availability and sales. KGI Securities analyst Ming-Chi Kuo estimated that Apple would sell 30-35 million iPhone X units during the holiday quarter. However, a new report from Japanese publication Nikkei claims that Apple will be producing only 20 million units of the iPhone X this year.

If true, that would be far from sufficient to meet the potential demand. Analysts estimate that the iPhone X pre-orders could surpass 50 million units. If the iPhone X continues to face production issues and most of the deliveries stretch out to early 2018, a large number of potential buyers could switch to Android or settle with the iPhone 8 or 8 Plus.